Ohio cities facing substantial loss of revenue from state

On behalf of Mockensturm, Ltd. posted in Tax Planning on Friday, April 8, 2016.

Taxes like, real estate, are always local. It really does not matter what an overall tax rate for some people or businesses happens to be, what matter to you or your business is the tax rate you pay.

In recent years, Ohio has seen some significant tax reductions at the state level. The legislature eliminated the state tax on decedent's estates. They also lowered the amount of money that was shared with local governments by reducing the Local Government Fund and the phase-outs of reimbursements that had been used to offset cuts from another tax, that on business machinery and inventory.

With any change like this, there is often a few years or two before the full effect of the change is felt. An Ohio newspaper looked at how all of these tax cuts would affect local communities throughout Ohio and found that more than 70 cities would see cuts of a $1 million or more.

The cities of Lucas County will see about a $13 million reduction, with Toledo absorbing the greatest share with more than $10.6 million in cuts. The newspaper notes that the cuts are likely understated, as some financial information concerning the money they received from the state has not been available in recent years.

The cities, like Toledo, will probably have to reduce services and make other cuts. This may not affect your business, but it will probably effect someone's business, which means there may be a push to increase some local taxes to compensate for the lost revenue from the state.

Which could mean some of these tax cuts could reappear in the form of local tax hikes or additional fees as local governments attempt to cope with these changes.

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